BREAKING: Chancellor cuts Stamp Duty for FTBs and properties under £250k

Kwarteng says measures are to support growth, increase confidence and help families aspiring to own their own home.

stamp duty

Chancellor Kwasi Kwarteng has announced changes to England and NI’s Stamp Duty system that, commentators have already predicted, are likely to significantly stimulate the lower end of the property market and, in particular, first time buyer (FTB) activity.

The zero-rated range for all purchasers rises from £125,000 to £250,000 while the zero rate paid by first-time buyers rises for homes worth up to £425,000. This is an increase from £300,000.

Also, the value of homes that FTBs can claim this zero-rate relief on rises to £625,000, a sop to struggling young aspiring buyers in London and the South. This means FTBs buying a £500,000 property, for example, will now pay zero Stamp Duty on the £425,000 portion of the value, but pay 2% on the remainder.

“Today’s statement is about growth – home ownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society so to support growth, increase confidence and help families aspiring to own their own home I can announce that we are cutting Stamp Duty,” said Kwarteng (main pic).

The announcement is the first permanent change to the house purchase tax system since November 2017 when the FT zero rate up to £300,000 was introduced.
Since then several ‘holidays’ have been implemented all related to stimulating the economy post-Covid, although these ended on 1st October last year.

Initial reaction

emerson

Nathan Emerson (pictured), CEO of Propertymark, says: “The rebalancing of the thresholds for which stamp duty is paid, in particular for first time buyers is long overdue to catch up with house prices which have risen at an extraordinary rate.

“We did hope that stamp duty for downsizers or last time movers would have also been reviewed to release the latter part of the market, which when blocked stops movement further down for second steppers and first-time buyers, causing stagnation as buyers have nothing to move on to.”


Phillip Stevens (pictured), director of Richmond estate agency Antony Roberts, says: “This stamp duty incentive could be a much-needed boost just as the housing market is starting to slow down and mortgage costs are rising.

“We particularly welcome the decision to make it a permanent move. The temporary nature of the last stamp duty concession, which was tied to completion dates, caused chaos as everybody tried to move in the same week, making it a nightmare for solicitors and removal companies as well.

“Making it a permanent adjustment is sensible and far less disruptive, avoiding the delays and bottlenecks we saw last time.”


Dominic Agace

Dominic Agace (pictured), chief executive of leading estate agents Winkworth, with more than 100 offices nationwide, said: “At a time when the BOE has announced we are already in recession, it is welcome to have a promptly presented agenda for growth.

“Some big and welcome changes initiated with a long overdue reduction of the extremely negative stamp duty, which hopefully now will allow a better functioning housing ladder. It is vital we get new buyers on to the housing ladder.

“Other initiatives to encourage investment in special zones are also welcome and can help much needed regeneration to these areas, creating better local environments and higher quality housing stock for people to enjoy.


Jeremy Leaf (pictured), north London estate agent and a former RICS residential chairman, says: “The Chancellor clearly recognises the dangers in terms of reduced revenue from stamp duty, given the recent reduction in housing market activity, and has taken steps to boost the market.

“The stamp duty cut, particularly for first-time buyers, should encourage those at the first rung of the housing ladder to take the plunge, which will be good not just for the market but for job and social mobility across the board, as well as the wider economy.

“It is good news that it is an immediate and permanent reduction which means that existing transactions shouldn’t be unduly delayed and the benefits can be felt as soon as possible.

“We would have liked to have seen extra help not just for first-time buyers but to encourage energy-efficient properties and more investment on cutting energy use.


Brian Murphy, (pictured) Head of Lending at Mortgage Advice Bureau, says: “This could turn out to be an excellent time to properly revisit the structure of stamp duty.

“Numerous governments have tinkered with it, but it tends to push up prices for a short period and then momentum generally mellows.

“It hasn’t been long since we last had a stamp duty break, and these things tend to generate momentum that causes a flurry of activity followed by a period of slowdown. However, the permanency of today’s announcement may temper a sudden surge of activity and allow some control of the UK property market to be regained.

Still, the crux of the issue is that any changes in stamp duty will not address the main problem right now: a significant supply shortage.”


Link to Stamp Duty commentPaula Higgins (pictured), Chief Executive of HomeOwners Alliance, says: “The fact the change is permanent and starts today is particularly welcome as it will avoid the chaos of the previous stamp duty holidays. It means those who had put their move on hold earlier this week when speculation began can now crack on with their exchange and completion

See the official SDLT page.

Pic credit: BBC News


2 Comments

  1. Some good news for a change on the thresholds definitely which is exactly what I wanted to happen. However I was hoping for a sensible option for Investment buyers/Landlords as they have no incentive to continue in the market with the ridiculous leveling up policy for Landlords/Tenants. All that is doing is pushing up rents due to lack of available property in the PRS. Totally disagree with NO stamp duty on new builds as well should all be the same.

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